Does the Churchs Chicken Sublessee's indemnification obligation survive the termination of the sublease?
Churchs_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
Sublessee further agrees to indemnify and hold harmless Master Landlord and Sublessor, its affiliates, and their respective successors, assigns, past and present stockholders, directors, officers, employees, agents and representatives, and the Sublessor or Master Landlord under all ground or underlying leases, from and against any and all loss, cost, liability, damage, and expense (including, without limitation, reasonable attorneys' fees actually incurred on an hourly basis and not as a mere percentage of the amount claimed) actually incurred in connection with or arising from any claims by any persons by reason of injury to persons or damage to property occasioned by any use, occupancy, condition, occurrence, happening, act, omission, or negligence referred to in the preceding sentence.
The provisions of this Section shall survive the expiration or sooner termination of this Sublease with respect to any claims or liability occurring prior to such expiration or termination and shall not be limited by reason of any insurance carried by Sublessor and Sublessee.
Source: Item 23 — RECEIPT (FDD pages 68–406)
What This Means (2025 FDD)
According to Churchs Chicken's 2025 Franchise Disclosure Document, the Sublessee's indemnification obligations do indeed survive the termination of the sublease. Specifically, the sublease agreement states that the provisions of the indemnification section will remain in effect even after the sublease expires or is terminated early. This survival applies to any claims or liabilities that arise before the termination or expiration date.
This means that even after a Churchs Chicken franchise sublease ends, the franchisee (Sublessee) could still be responsible for covering costs, losses, liabilities, damages, and expenses, including attorney's fees, if these are related to claims resulting from injury to people or damage to property that occurred during the term of the sublease. These claims could arise from the franchisee's use, occupancy, condition, or negligence related to the property.
For a prospective Churchs Chicken franchisee, this clause highlights the importance of maintaining adequate insurance coverage and managing the premises responsibly throughout the sublease term. It also emphasizes the need to understand and address any potential liabilities promptly, as the responsibility for these liabilities can extend beyond the active period of the sublease. The franchisee should consult with legal counsel to fully understand the scope of these indemnification obligations and how they might impact their business.